Linking The Resource-Based View of The Firm to Strategic Management, Part II

Corporate strategy
Proponents of the resource-based view argue that diversifications are most likely to be successful if based on the firms’ specific resources. In other words, diversification is recommended to exploit resources that can have uses in markets that are not currently exploited by the firm. This means that the resource-based view supports related diversification, it argues that ‘the rationale for multi business organizations ultimately lies in sharing strategic capabilities among businesses’ (Robins and Wiersema, 1995).

Change
The resource-based view strand that specifically addresses changing environments it is worth commenting that if intangible resources are a source of competitive advantage it is of prime importance for organizations to know about them: thanks to them organizations may be able to deploy resources in an effective and efficient manner.
However, if managers are not aware of what generates success, they may inadvertently change something that is critical, for example via structural changes such as delayering or process changes such as business process re-engineering.

Dynamic capabilities
The dynamic capability approach focuses attention on the firm’s ability to renew its resources in line with changes in its environment. Dynamic capabilities refer to a firm’s ability to alter its resources by creating, integrating, recombining and releasing resources (Teece et al., 1997; Eisenhardt and Martin, 2000). In other words dynamic capabilities are directed at the creation of future valuable resources (Bowman and Ambrosini, 2003). Dynamic capabilities can change the resource stocks in essentially four main ways: reconfiguration, leveraging, learning and integration (Teece et al., 1997; Bowman and Ambrosini, 2003).

On a practical basis when examining a firm using a resource-based view lens it is worth asking the following questions are: What are the firm’s sources of competitive advantage? How unique are they? How sustainable are they? Are they difficult to imitate? How do you renew them?

Sumber:
Jenkins, M., Ambrosini, V., & Collier, N. (2016). Advanced Strategic Management. New York: Palgrave.